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1 Michigan Supreme Court Lansing, Michigan Syllabus This syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the convenience of the reader. Chief Justice: Robert P. Young, Jr. Justices: Michael F. Cavanagh Stephen J. Markman Mary Beth Kelly Brian K. Zahra Bridget M. McCormack David F. Viviano Reporter of Decisions: Corbin R. Davis FISHER SAND AND GRAVEL COMPANY v NEAL A SWEEBE, INC Docket No Argued January 9, 2013 (Calendar No. 1). Decided July 30, On August 13, 2009, Fisher Sand and Gravel Company brought an action in the Midland Circuit Court against Neal A. Sweebe, Inc., asserting claims for breach of contract, account stated, and unjust enrichment with regard to concrete supplies plaintiff provided to defendant. Plaintiff filed an amended complaint on October 29, 2009, that added a claim for amount owed on an open account. Plaintiff had provided concrete supplies to defendant from October 1991 through October 2004 and had issued invoices, and defendant had made sporadic payments toward the accrued balance. On May 9, 2005, defendant received a delivery of goods from plaintiff, and plaintiff issued an invoice for $ On May 13, 2005, defendant made a payment of $ That was the last time that defendant made any payment to plaintiff. Defendant moved for summary disposition, contending that the action was barred by the fouryear limitations period in the Uniform Commercial Code (UCC) pertaining to contracts for the sale of goods, MCL (1). Plaintiff contended that defendant s obligation to pay on the open account was an obligation that was distinct from the underlying contract for the sale of goods and that the action was governed by the general six-year limitations period applicable to actions for breach of contract contained in the Revised Judicature Act (RJA), MCL (8). The court, Michael J. Beale, J., agreed with defendant and granted its motion for summary disposition. Plaintiff appealed the dismissal of its account-stated and open-account claims. The Court of Appeals, OWENS, P.J., and METER, J. (O CONNELL, J., dissenting), affirmed, concluding that the UCC s four-year limitations period was applicable to both plaintiff s open-account and account-stated claims. 293 Mich App 66 (2011). The Supreme Court granted leave to appeal. 491 Mich 914 (2012). In an opinion by Justice ZAHRA, joined by Chief Justice YOUNG and Justices CAVANAGH, KELLY, and MCCORMACK, the Supreme Court held: Because actions on an open account and actions on an account stated are distinct and independent from the underlying transactions giving rise to the antecedent debt, neither action is governed by the four-year limitations period provided in 2725 of the UCC, MCL Rather, both actions are governed by the general six-year limitations period applicable to actions for breach of contract contained in the RJA, MCL (8). 1. Michigan law has recognized a number of collection actions, including open-account claims, mutual-and-open-account-current claims, and account-stated claims, but Michigan law

2 concerning these claims has not always been clear. An open account is one that consists of a series of transactions and is continuous or current, and not closed or stated. An account stated is a contract based on assent to an agreed balance, and it is an evidentiary admission by the parties of the facts asserted in the computation and of the promise by the debtor to pay the amount due. An open account may be converted into an account stated, and whether that conversion has occurred will depend on the facts. 2. Account stated is an expression to convey the idea of a contract, having an account for its consideration, and is no more an account than is a promissory note, having a like consideration for its support. It requires the manifestation of assent by both parties to the correctness of the statement of the account between them. Assent may be inferred from a party s inaction; as against a party receiving an account, and not objecting to it within a reasonable time, its correctness may be considered as admitted. It is not necessary, in support of an account stated, to show the nature of the original transaction, or indebtedness, or to give the items constituting the account. Rather, an action on an account stated is an independent cause of action, separate and distinct from the underlying transactions giving rise to the antecedent debt. Therefore, contrary to the opinion of the Court of Appeals in this case, in an account-stated action it is immaterial whether the underlying transactions involved the sale of goods. Because the language of MCL plainly states that it only applies to actions for breach of contract for the sale of goods, and an action on an account stated is an action on a promise to pay a certain amount that has nothing to do with any underlying sales transactions, MCL does not apply to an action on an account stated. Rather, it being established that an account stated is a contract based on assent to an agreed balance, an action on an account stated is subject to the sixyear limitations period governing general contract actions provided in MCL (8). An account-stated claim accrues when assent to the statement of account is expressed or implied. Having erroneously concluded that plaintiff s account-stated claim was time-barred, the trial court did not consider whether defendant had properly objected to plaintiff s statement of the account. The case had to be remanded for consideration of whether defendant assented to plaintiff s statement of the account. 3. In an action on an open account, there is no assent to the balance due. Thus, the creditor may be required to establish the validity of the entries in the account. When an integral component of a transaction for goods or services is an express agreement for the periodic payment of money, an open-account claim cannot be established by the mere performance or nonperformance of the contract obligation. Under those circumstances, the creditor s remedy is to timely pursue a breach of contract action when the debtor fails to live up to the terms of the underlying agreement. When the credit relationship is not defined as an integral part of the transaction for goods or services, and instead arises from a course of dealing between the parties, an open-account claim may arise by implied contract. With regard to the limitations period applicable to open-account claims, the language of MCL plainly states that it only applies to actions for breach of contract for the sale of goods. An open-account claim is not based on a breach of contract for the sale of goods; it is an action to collect on the single liability stemming from the parties credit relationship regardless of the underlying transactions comprising the account. The Court of Appeals erred by holding that the four-year limitations period provided in MCL applies to actions on an open account. An open-account claim, like an account-stated claim, is premised on an express or implied contract and is subject

3 to the six-year period of limitations governing general contract actions set forth in MCL (8). An open-account claim generally accrues on the date of each item proved in the account. Those items are severally barred when as to them the statute has run. A partial payment on an account restarts the running of the limitations period unless it is accompanied by a declaration or circumstance that rebuts the implication that the debtor by partial payment has admitted the full obligation. In this case, it was unclear whether an integral component of the parties transactions was an express agreement for the periodic payment of money, and the trial court was directed to decide that issue on remand. The trial court was also directed to revisit its determination that defendant s May 13, 2005, payment was disconnected from the other transactions comprising the account. If that payment or any other payment within the six-year period preceding commencement of this case operated to renew defendant s promise to pay its entire indebtedness to plaintiff, plaintiff s open-account claim was timely commenced within the six-year limitations period provided in MCL (8). Judgment of the Court of Appeals reversed; case remanded to the trial court for further proceedings. Justice MARKMAN, concurring in part and dissenting in part, agreed with the majority that plaintiff s account-stated claim was subject to the six-year limitations period governing general contract actions set forth in MCL (8), but disagreed with the majority that plaintiff s open-account claim was subject to the same six-year limitations period governing general contract actions. Justice MARKMAN concluded that the UCC s four-year limitations period, MCL , applies to an open-account claim where the balance owed on the open account arose from the underlying sale of goods as it did in this case. The presence in an account-stated claim of an independent agreement concerning the single liability due under the account, and the absence of an independent agreement concerning any single liability in an open-account claim, is the critical distinction that determines which limitations period applies to each claim. Because there is no independent agreement in an open-account claim, the plaintiff must prove his or her right to collect on each of the underlying transactions that comprise the account. An openaccount claim is the equivalent of a suit for the breach of the legal obligations that result from the parties discrete transactions that comprise the account. Accordingly, where the underlying transactions pertain to an agreement to pass title of goods from the seller to the buyer for a price, as in this case, under the language of the UCC the four-year limitations period of MCL must be applied. Justice VIVIANO took no part in the decision of this case State of Michigan

4 Michigan Supreme Court Lansing, Michigan Opinion Chief Justice: Robert P. Young, Jr. Justices: Michael F. Cavanagh Stephen J. Markman Mary Beth Kelly Brian K. Zahra Bridget M. McCormack David F. Viviano FILED JULY 30, 2013 S T A T E O F M I C H I G A N SUPREME COURT FISHER SAND AND GRAVEL COMPANY, Plaintiff-Appellant, v No NEAL A SWEEBE, INC., Defendant-Appellee. BEFORE THE ENTIRE BENCH (except VIVIANO, J.) ZAHRA, J. At issue in this case is whether the four-year period of limitations in 2725 of article 2 of Michigan s Uniform Commercial Code (UCC), 1 MCL , is applicable to actions on either an open account or an account stated when the underlying debt stemmed from the sale of goods. Because actions on an account stated and actions on an open account are distinct and independent from the underlying transactions giving rise to 1 MCL et seq.

5 the antecedent debt, neither action is governed by the four-year limitations period provided in 2725 of the UCC. Rather, both actions are governed by the six-year period of limitations provided in MCL (8). Accordingly, we reverse the contrary judgment of the Court of Appeals, which barred plaintiff s open account and account stated actions as untimely, and remand the case to the trial court for further proceedings consistent with this opinion. I. FACTS AND PROCEEDINGS Plaintiff provided concrete supplies to defendant commencing in October Plaintiff timely and regularly invoiced defendant for these supplies. Defendant made sporadic payments to plaintiff in random amounts. Plaintiff maintained an account that recorded the supplies sold to defendant and the payments defendant submitted to plaintiff on that account. Through the course of the litigants business relationship, defendant never paid its account in full. 2 Commencing in 2003, defendant acquired from plaintiff less product than it had acquired in prior years. Specifically, defendant made only 4 purchases from plaintiff in 2003 and 10 purchases from plaintiff in On May 9, 2005, defendant made what turned out to be its final purchase from plaintiff. On that 2 Defendant takes issue with the amount claimed due by plaintiff. Defendant maintains plaintiff owed defendant outstanding sums as a result of work done on a nuclear plant in Midland, a project that was abandoned by Consumers Power Company in Thus, defendant claims that it was entitled to offset the entire amount that plaintiff claimed it was owed if such old events were to be litigated. Plaintiff responds that the alleged open account on which its claim is predicated began in October 1991, more than 6 years after the nuclear plant project was abandoned. Thus, plaintiff claims, any counterclaim for setoff was barred at the time plaintiff s claim accrued. 2

6 date, plaintiff delivered a small amount of supplies to defendant, for which defendant was invoiced $ Defendant paid the invoiced amount on May 13, 2005, by check. Defendant did not designate on its check that the tendered amount was to satisfy the invoice of May 9, Plaintiff claims it credited the payment against the open account balance. That was the last payment defendant made to plaintiff. More than four years later plaintiff sued defendant, claiming that defendant owed plaintiff $92,968.57, including $3, in finance charges. 3 breach of contract, unjust enrichment, and account stated. 4 Plaintiff s claims included Plaintiff filed an amended complaint on October 29, 2009, adding a claim for amount owed on an open account. Defendant moved for summary disposition pursuant to MCR 2.116(C)(7), arguing that plaintiff s claims were barred by the four-year period of limitations provided in 2725 of the UCC. Plaintiff countered that defendant s obligation to pay on the open account was independent of any sale of goods and that its claim was therefore governed by the sixyear period of limitations provided in MCL (8). Whether defendant s May 13, 2005, payment was a payment on the open account or a payment for a distinct transaction was also disputed because defendant s $ payment matched an invoice for the same amount dated May 9, The trial court held that plaintiff s action was governed by 3 The record is not entirely clear regarding the amount that plaintiff claims it is owed. Contrary to the figures used in the complaint and the amended complaint, in plaintiff s brief on appeal in this Court it claims it is owed $91, for materials provided over the course of the business relationship and $1, for interest on the account and late payment charges. 4 In support of its account stated claim, plaintiff attached as exhibits to its complaint a summary of the account and an AFFIDAVIT OF ACCOUNT STATED, the combination of which verified the alleged amount due pursuant to MCL

7 the four-year period of limitations provided in 2725 because the parties open account related to the sale of goods. Therefore, the trial court concluded, plaintiff s claims based on open account and account stated were not timely because the action was commenced more than four years after the claims accrued. 5 A divided panel of the Court of Appeals affirmed in a published opinion, holding that the UCC s four-year limitations period was applicable to actions on both an open account and an account stated. 6 5 Because the trial court granted summary disposition in favor of defendant solely on the basis of its determination that the UCC s four-year limitations period applied, the court did not decide whether the parties had assented to a sum stated, either expressly or by implication because of defendant s inaction, thus converting the open account claim to an account stated claim. Nor did the trial court find that defendant s May 9, 2005, payment of $ revived plaintiff s cause of action. 6 Fisher Sand & Gravel Co v Neal A Sweebe, Inc, 293 Mich App 66; 810 NW2d 277 (2011). The Court of Appeals described the statutory context of the dispute: The Revised Judicature Act provides a limitations period of six years for... actions to recover damages... due for breach of contract. MCL (8). All sales of goods are governed by Article 2 of the UCC, MCL Section 2725 of the UCC, MCL , provides that [a]n action for breach of any contract for sale must be commenced within 4 years after the cause of action has accrued In actions brought to recover the balance due upon a mutual and open account current, the claim accrues at the time of the last item proved in the account. MCL Plaintiff contends that its claim accrued on May 13, 2005, the last date on which defendant made a payment. Assuming, without deciding, that defendant s May 13, 2005, payment may be considered a payment toward the parties open account, plaintiff s action was filed in August 2009, more than four years after the May 2005 payment. Thus, if plaintiff s action is governed by the four-year limitations period in the UCC, it is untimely. [Id. at (citation omitted).] 4

8 The Court of Appeals noted that it was unable to find anything in Michigan s jurisprudence directly addressing whether the four-year period of limitations in the UCC is applicable to an open account relating to the sale of goods. 7 Plaintiff argued that the UCC did not apply to its claim because payment on an open account triggers a new obligation, separate and distinct from an underlying agreement. 8 The Court of Appeals dismissed plaintiff s contentions because the cases supporting plaintiff s argument did not involve the sale of goods subject to the UCC. 9 The Court of Appeals consulted the official comments to the UCC, 10 which provide that the purpose of article 2 is to take sales contracts out of the general laws limiting the time for commencing contractual actions Though it acknowledged that the official comments do not have the force of law, the Court of Appeals noted that applying the UCC s four-year period of limitations to actions on open account would accomplish the goal identified in the 7 The Court of Appeals referred only to plaintiff s open account action. It is clear from the context of the Court of Appeals decision that the Court s analysis applied to plaintiff s open account action and its account stated action. 8 Id. at 72, citing Collateral Liquidation, Inc v Palm, 296 Mich 702, 704; 296 NW 846 (1941), Miner v Lorman, 56 Mich 212, 216; 22 NW 265 (1885), and Bonga v Bloomer, 14 Mich App 315; 165 NW2d 487 (1968). 9 Fisher Sand & Gravel, 293 Mich App at The official comments are prepared by the National Conference of Commissioners on Uniform State Laws and the American Law Institute. Thomson West, Uniform Commercial Code: Official Text and Comments ( ed), Preface, p iii. 11 Fisher Sand & Gravel, 293 Mich App at 73 (citation omitted). 5

9 comments of promoting uniformity and consistency among the jurisdictions. 12 The Court of Appeals also noted that [o]ther jurisdictions that have addressed this question have favored applying the UCC limitations period to an action based on an open account related to the sale of goods. 13 Judge O CONNELL dissented, asserting that [p]ayment on an open account triggers a new obligation, separate and distinct from an underlying agreement, and therefore, the new obligation is governed by the six-year period of limitations in MCL (8). 14 Thus, Judge O CONNELL would have reversed the judgment of the trial court. 15 This Court granted leave to appeal to determine whether an action on an open account relating to the sale of goods is subject to the four-year period of limitations in 2725 of the UCC or the general six-year period of limitations applicable to contract 12 Id. 13 Id. Specifically, the Court of Appeals relied on a case from the Oregon Court of Appeals, Moorman Mfg Co of California, Inc v Hall, 113 Or App 30, 33; 830 P2d 606 (1992), which held that [a]lthough an account stated is based on a separate agreement between the parties, it relates to and cannot be divorced from the underlying sales transaction. The UCC drafters intended that one limitation apply to all transactions involving the sale of goods, regardless of the theory of liability asserted. [Citation omitted.] 14 Fisher Sand & Gravel, 293 Mich App at 76 (O CONNELL, J., dissenting). 15 Id. at 78. 6

10 actions in MCL (8). 16 II. STANDARD OF REVIEW MCR 2.116(C)(7) allows a party to file a motion for summary disposition on the ground that a claim is barred because of the expiration of the applicable period of limitations. A movant under MCR 2.116(C)(7) is not required to file supportive material, and the opposing party need not reply with supportive material. Moreover, the contents of the complaint are accepted as true unless contradicted by documentation submitted by the movant. 17 Appellate review of a trial court s summary disposition ruling pursuant to MCR 2.116(C)(7) is de novo. 18 Questions of statutory interpretation are also reviewed de novo. 19 III. ANALYSIS A. COLLECTION ACTIONS GENERALLY Michigan has recognized a number of collection actions. These actions include open account claims, mutual and open account current claims, and account stated claims. 16 Fisher Sand & Gravel Co v Neal A Sweebe, Inc, 491 Mich 914 (2012). Absent from our grant order is any reference to account stated actions. Thus it appears that at the time leave was granted we failed to appreciate the distinction between open accounts and accounts stated. 17 Patterson v Kleiman, 447 Mich 429, 434 n 6; 526 NW2d 879 (1994). 18 Spiek v Dep t of Transp, 456 Mich 331, 337; 572 NW2d 201 (1998). 19 In re MCI Telecom Complaint, 460 Mich 396, 413; 596 NW2d 164 (1999). 7

11 The purpose of these causes of action is to recover sums due that arose out of a course of dealing between the parties. Historically the common law has distinguished an open account from a mutual and open account current. An open account is traditionally defined as 1. [a]n unpaid or unsettled account. 2. [a]n account that is left open for ongoing debit and credit entries and that has a fluctuating balance until either party finds it convenient to settle and close, at which time there is a single liability. 20 This Court has characterized an open account as one which consists of a series of transactions and is continuous or current, and not closed or stated. 21 By comparison, a mutual account is traditionally defined as [a]n account showing mutual transactions between parties, as by showing debits and credits on both sides of the account. 22 Consistent with this traditional definition, this Court has characterized a mutual and open account current as an account that is both mutual and open, resulting from a course of dealing where each party furnishes credit to the other on the reliance that upon settlement the accounts will be allowed, so that one will reduce the balance due on the other. 23 An account stated action is based on an agreement, between parties who have had previous transactions of a monetary character, that all the items of the accounts 20 Seyburn, Kahn, Ginn, Bess, Deitch & Serlin, PC v Bakshi, 483 Mich 345, ; 771 NW2d 411 (2009), quoting Black s Law Dictionary (7th ed). 21 A Krolik & Co v Ossowski, 213 Mich 1, 7; 180 NW 499 (1920) (citation omitted). 22 Black s Law Dictionary (7th ed), p In re Hiscock Estate, 79 Mich 536, 538; 44 NW 947 (1890). 8

12 representing such transactions are true and that the balance struck is correct, together with a promise, express or implied, for the payment of such balance. 24 Importantly, an open account may be converted into an account stated: 25 The conversion of an open account into an account stated, is an operation by which the parties assent to a sum as the correct balance due from one to the other; and whether this operation has been performed or not, in any instance, must depend upon the facts. That it has taken place, may appear by evidence of an express understanding, or of words and acts, and the necessary and proper inferences from them. When accomplished, it does not necessarily exclude all inquiry into the rectitude of the account. The parties may still impeach it for fraud or mistake. [26] In the past these claims have been conflated or treated inconsistently by the Legislature and Michigan courts. 27 For example, the burden-shifting statute (now MCL ) has expressly included open account claims and claims on an account stated since as far back as the 1870s, but has never expressly included claims on mutual and open accounts. 28 Furthermore, the accrual of mutual and open account claims is 24 Leonard Refineries, Inc v Gregory, 295 Mich 432, 437; 295 NW 215 (1940), quoting Thomasma v Carpenter, 175 Mich 428, 434; 141 NW 559 (1913). 25 While an open account may be converted into an action on an account stated, we are aware of no authority that requires an open account as a prerequisite to an action on an account stated. 26 White v Campbell, 25 Mich 463, 468 (1872) (in which the plaintiff brought action on an account stated). 27 To the extent the Legislature desires to clarify this area of the law, it might consider revisiting the statutory framework that corresponds with these collection actions. 28 See How Stat 7525; 1871 CL

13 governed by MCL , while no specific statutory provision exists for the accrual of either open account claims or claims on an account stated. 29 At times, this Court has not been a model of clarity when addressing collection actions. As previously discussed, this Court has characterized a mutual and open account current as an account that is both mutual and open, resulting from a course of dealing where each party furnishes credit to the other on the reliance that upon settlement the accounts will be allowed, so that one will reduce the balance due on the other. 30 But in Fuerbringer v Herman the Court held that payment of money on an account is sufficient to render the account mutual. 31 Allowing payments toward an account to be sufficient to render the account mutual is against the general authority. As observed in Williston on Contracts: [I]t is generally held essential, in order to constitute such an account as shall fall within the principle in question, that there shall be mutual open, current dealings and claims subject to a future final balance. A payment, therefore, given and received as partial discharge of an account for goods or services does not make the account mutual; it merely diminishes the amount due on a one-sided account. [32] The Fuerbringer Court dismissed this Court s earlier decision in In re Hiscock Estate without analysis, 33 leaving practitioners and lawmakers to wonder whether there is 29 See MCL ( In actions brought to recover the balance due upon a mutual and open account current, the claim accrues at the time of the last item proved in the account. ). 30 In re Hiscock Estate, 79 Mich at Fuerbringer v Herman, 225 Mich 76, 79; 195 NW 693 (1923) Williston, Contracts (4th ed), 79.26, pp (citations omitted). 10

14 a difference in Michigan between an open account and an open and mutual account current. As recently as 2009, this Court considered whether an action to collect past due attorney fees was an open and mutual account current. While the Court concluded that the action was not an open and mutual account current, this holding was not based on the lack of mutual exchange of credit between the law firm and its client but instead on the fact that the underlying service contract expressly provided the terms of payment. 34 Notwithstanding these inconsistencies, the common thread in actions on accounts is that they arise where the parties have conducted a series of transactions for which a balance remains to be paid. 35 We now turn to the instant matter, which involves an open account claim and an account stated claim. B. ACTIONS ON AN ACCOUNT STATED Of the three claims discussed in this opinion, the account stated claim is most clearly defined under Michigan law. An account stated is a contract based on assent to an agreed balance, and it is an evidentiary admission by the parties of the facts asserted in the computation and of the promise by the debtor to pay the amount due. 36 This Court has characterized an account stated as but an expression to convey the idea of a contract having an account for its consideration, and is no more an account than is a promissory 33 Fuerbringer, 225 Mich at Seyburn, 483 Mich at Am Jur 2d, Accounts and Accounting, 8, p Corbin, Contracts (rev ed), 72.4(2), p 478, citing Restatement Contracts, 2d, 282, comment c. 11

15 note or contract, having a like consideration for its support. 37 An account stated, like all contracts, requires mutual assent. Specifically, [a]n account stated requires the manifestation of assent by both parties to the correctness of the statement of the account between them. 38 In his treatise on contract law, Professor Arthur Corbin summarized the nature of an action on an account stated: If a claimant renders an account and it is assented to as correct by the other party with an express or implied promise to pay, an action may be maintained on the promise. The account stated is a new, independent cause of action superseding and merging the antecedent causes of action represented by the particular items included in the computation. [39] In White v Campbell, this Court likened the obligation to pay the antecedent debt to that commonly associated with a promissory note: [T]he agreed statement serves in place of the original account, as the foundation of an action. It becomes an original demand, and amounts to an express promise to pay the actual sum stated. The creditor becomes entitled to recover the agreed balance, in an action based on the fact of its acknowledgment by the debtor, upon an adjustment of their respective claims. The effect of the operation is said to be much the same as though the debtor had given his note for the balance. [40] The parties to an account stated need not expressly assent to the sum due, as there are instances when assent may be inferred from a party s inaction: 37 A Krolik & Co, 213 Mich at 8, quoting Auzerais v Naglee, 74 Cal 60; 15 P 371 (1887) Corbin, Contracts (rev ed), 72.4(2), p Id. at 72.4, pp (emphasis added). 40 White, 25 Mich at 468 (citations omitted) (emphasis altered). 12

16 [A]s against a party receiving an account, and not objecting to it within a reasonable time, its correctness may be considered as admitted by him, and the balance as the debt; or, in other words, that the party rendering the account may, under such circumstances, treat it as an account stated.... If the party to whom the account is rendered, object[s] within a reasonable time, there is no room for inferring an admission of its correctness. [41] In other words, the debtor s new promise to pay is a matter of express or implied contract, depending on the conduct of the parties. When the parties expressly agree to the sum due, the stated account forms an express contract. By contrast, when one party s assent is inferred from inaction, the stated account operates to form an implied contract. 42 No matter the method of assent, the debtor in an account stated action has received goods or services without having paid for them, and an action exists when the price of those goods or services is greater than the sum paid White, 25 Mich at 469, citing Lockwood v Thorne, 11 NY 170 (1854), and Lockwood v Thorne, 18 NY 285 (1858). 42 An account stated is an implied-in-fact contract when one party assents by implication because the requisite mutual assent is inferred from the conduct of the parties. See Cascaden v Magryta, 247 Mich 267, 270; 225 NW 511 (1929) Corbin, Contracts (rev ed), 72.1(3), p 457. Historically, a promise resulting from an account stated was enforced because it was a promise to pay a pre-existing debt called by the courts past consideration. In reality, the promise is enforced as other subsequent promises, such as a subsequent promise after the receipt of a material benefit or the promise to pay a debt that is barred by the statute of limitations. In each of these factual situations, the retention of a benefit previously received, the goods or services previously rendered, is unjust or the retention of the prior transfer of goods or services cannot be justified on the basis of a legal principle or a legal relationship. This is the fundamental reason for the enforcement of the promise. [Id. (citations omitted).] 13

17 The Court of Appeals held that because the transactions giving rise to the debt on account related to the sale of goods, the four-year period of limitations set forth in 2725 of the UCC applies to plaintiff s account stated claim. The Court of Appeals was persuaded by a case from the Oregon Court of Appeals that characterized account stated claims by the nature of the underlying obligations comprising the account. Specifically, the Michigan Court of Appeals relied on Moorman Mfg Co of California, Inc v Hall, which stated that [a]lthough an account stated is based on a separate agreement between the parties, it relates to and cannot be divorced from the underlying sales transaction. 44 But the Moorman Mfg case runs contrary to this Court s prior pronouncements regarding the materiality of the underlying transactions in an account stated action. As early as 1857 this Court observed: It is not necessary, in support of an account stated, to show the nature of the original transaction, or indebtedness, or to give the items constituting the account.... Neither does the nature of the original transaction, out of which the acknowledgment of indebtedness grew, appear to be material. [45] It follows, then, that an action on an account stated is indeed an independent cause of action, separate and distinct from the underlying transactions giving rise to the antecedent debt. Therefore, it is immaterial whether the underlying transactions involved the sale of goods. The Court of Appeals erroneously relied on the official comment to 2725 of the UCC to arrive at its result. The official comments to the UCC do not have the force of 44 Fisher Sand & Gravel, 293 Mich App at 74, quoting Moorman Mfg, 113 Or App at Stevens v Tuller, 4 Mich 387, (1857). 14

18 law. 46 When ascertaining the Legislature s intent, a reviewing court should focus first on the plain language of the statute in question, 47 and when the language of the statute is unambiguous, it must be enforced as written. 48 Examining the plain language of 2725, Professor Corbin concluded that, because an action on an account stated is not an action for breach of any contract for sale, 49 the four-year limitations period does not apply to actions on an account stated: Recent authorities hold that an action on an account stated arising out of a transaction in goods is subject to the four-year statute of limitations applicable to the underlying goods transaction. Despite the laudable goal of minimizing hardship and confusion for buyers and sellers doing business on a nationwide scale, the four-year limitation period of [ 2725] is inapplicable to an action on an account stated. First, [ 2725] states that an action for breach of any contract for sale must be commenced within four years.... An action on an account stated is not an action for the breach of a contract for sale. Rather, it is an action to enforce a subsequent promise to pay an account. Indeed, the action on such a promise is analogous to an action on a promise to pay embodied in a note or letter of credit. An action on either of these formal promises to pay is subject to the limitations period applicable to the promise to pay, not the underlying transaction, which might be a sale of goods. [50] 46 Shurlow v Bonthuis, 456 Mich 730, 735 n 7; 576 NW2d 159 (1998), citing White & Summers, Uniform Commercial Code (3d ed), 4, p 12; see also Prime Fin Servs LLC v Vinton, 279 Mich App 245, 260 n 6; 761 NW2d 694 (2008). 47 Klooster v City of Charlevoix, 488 Mich 289, 296; 795 NW2d 578 (2011), citing Sun Valley Foods Co v Ward, 460 Mich 230, 236; 596 NW2d 119 (1999). 48 Sun Valley, 460 Mich at MCL Corbin, Contracts (rev ed), 72.4(2), pp (citations omitted). 15

19 Because the language of 2725 plainly states that it only applies to actions on the sale of goods, 51 and an action on an account stated is an action on a promise to pay a certain amount that has nothing to do with any underlying sales transactions, the Court of Appeals erred by relying on the official comment to 2725 of the UCC. Further, even if the underlying debt stemmed from the sale of goods, the Court of Appeals erred by concluding that the four-year limitations period applies because the nature of the underlying transactions is immaterial. Therefore, it being established that an account stated is a contract based on assent to an agreed balance, 52 an action on an account stated is subject to the six-year limitations period governing general contract actions provided in MCL (8) See also MCL (stating that article 2 of the UCC applies to transactions in goods) Corbin, Contracts (rev ed), 72.4(2), p A cause of action on an account stated accrues upon an adjustment of the parties respective claims against one another. White, 25 Mich at 468 ( The creditor becomes entitled to recover the agreed balance, in an action based on the fact of its acknowledgement by the debtor, upon an adjustment of their respective claims[.] ) (emphasis added). In other words, the accrual of an account stated claim occurs when assent to the statement of account is either expressed or implied Corbin, Contracts (rev ed), 72.4(2), p 473. Further, it has also long been established in Michigan law that payment on an account stated renews the running of the period of limitations. Miner, 56 Mich at 216. In Miner, Chief Justice COOLEY opined: [Partial payment of a demand] operates as an acknowledgment of the continued existence of the demand, and as a waiver of any right to take advantage, by plea of the statute of limitations, of any such lapse of time as may have occurred previous to the payment being made. The payment is not a contract; it is not in itself even a promise; but it furnishes ground for implying a promise in renewal from its date, of any right of action which before may have existed. [Id.] 16

20 Applying these legal principles to the present case, plaintiff submitted with its complaint a summary of the account and an AFFIDAVIT OF ACCOUNT STATED. Defendant did not expressly assent to the balance due as reflected in this affidavit. Nonetheless, plaintiff claims its statement of the account stood unimpeached at the time the trial court dismissed plaintiff s claims. 54 Having erroneously concluded that plaintiff s claim was time-barred, the trial court did not consider whether defendant had properly objected to plaintiff s statement of the account. On remand, we direct the trial court to consider whether plaintiff presented evidence that defendant assented to plaintiff s statement of the account, either expressly or by implication. C. ACTIONS ON AN OPEN ACCOUNT Like account stated claims, actions on an open account have long been recognized in Michigan. 55 Nonetheless, the caselaw defining this claim is far less developed than the caselaw addressing accounts stated. This may be because a suit on an open account is, 54 While defendant does not contest that it owes plaintiff, it does contend that it should be allowed to offset the amount owed plaintiff against money plaintiff owes defendant from prior dealings. This contention is inconsequential to the issue before this Court and, therefore, we take no position on it. 55 See Locke v Farley, 41 Mich 405, 406; 1 NW 955 (1879) ( The action was brought on an account for goods alleged to have been sold and delivered to Locke by the defendants in error as a partnership under the name of Farley, Hawey & Co. A central issue to the case was whether the parties affidavits met the requirements of 1871 CL 5954 one of many predecessors of the modern-day burden-shifting statute, MCL The former statute applied to accounts stated and open accounts alike, as does the current statute); Snyder v Patton & Gibson Co, 143 Mich 350, 351; 106 NW 1106 (1906) ( The suit was brought to recover an unpaid balance upon an account for labor. ); Star Steel Supply Co v White, 4 Mich App 178, 180; 144 NW2d 673 (1966) ( The plaintiff s suit is based on a statement of the open account with an affidavit of open account.... ). 17

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